Parental depression is a significant risk factor for both internalizing and externalizing psychopathology, and specifically for depressive disorders, in offspring of depressed parents. Within a broad framework of risk processes, three central psychosocial mechanisms have been implicated in the transmission of psychopathology from depressed parents to their children-stressful parent-child interactions related to parental depression, the ways that children respond to and cope with this stress, and children's actual and perceived social competence. The focus of the proposed research will be the role of actual and perceived social competence and the relations between competence and coping in the prediction of internalizing and externalizing symptoms and disorders in children of depressed parents. These processes will be examined within the context of an ongoing randomized clinical trial evaluating the efficacy of a cognitive-behavioral preventive intervention for parents with a history of depression and their children. Effects of the preventive intervention for children of parental depression on coping and actual and perceived social competence will be examined as compared to children in a self-study control condition. [Relevance to Public Health: Research indicates that children of depressed parents are four times more likely to develop depression and other emotional or behavioral problems, which can be expensive and difficult to treat. Recent efforts to prevent depression in this population have been promising, indicating that early intervention may be a cost-effective way to reduce the increasing rates of depression and other mental disorders in this population. As new interventions gain empirical support, it is important to ascertain for whom, and under what conditions each intervention is successful in order to direct future research and maximize the delivery of beneficial services to society.]